OBR Daily Commentary

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Here’s What We Actually Know About The Amazon, Berkshire And J.P. Morgan Health Initiative (Hint: Very Little)

(MarketWatch) Feb 5, 2018 - Health experts say many have tackled rising health care costs, with limited results.

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William McGivney, PhD (Posted: February 06, 2018)

quotesOne tweet struck me in this story about the update on Amazon, JP Morgan and Berkshire and it is: • “I want there to be something to bring healthcare costs down.” Well, as a whole, general health care costs will never come down as I have written over the years. Healthcare technology innovations are always expensive. Many of these technologies turn out to be add-on interventions (monotherapy going to combination) or make more lines of therapy available by becoming first line (like anti-PD-1s and anti PD-L1s) pushing down previous first line agents to second line and then others to third line, etc. Importantly, our population of potential patients continues to get older. Actually, the most insightful comment came from Dr. Warren Buffet (honorary MD for my convenience) as the quote focused on working to “check the rise in health costs”. As such, whoever wrote the quote understands that the goal is to check or slow the rate of rise of healthcare expenditures. This is the best that we can hope for and aim for. quotes

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Amazon, Berkshire, JPMorgan Link Up to Form New Health-Care Company

(Bloomberg) Jan 30, 2018 - News Tuesday that Bezos’s Amazon.com Inc., Buffett’s Berkshire Hathaway Inc. and JPMorgan Chase & Co., led by Dimon, plan to join forces to change how health care is provided to their combined 1 million U.S. employees sent shock waves through the health-care industry.

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William McGivney, PhD (Posted: January 31, 2018)

quotesAn intriguing announcement was made this morning in that Amazon, Berkshire Hathaway, and JP Morgan will establish a joint venture to reduce health care costs and to improve services for their US employees. In this “Value” era of evaluation and valuation of health care stakeholder contributions to patient benefit, the establishment of this joint venture by these three industrial behemoths signals the initial recognition of counterpart managed care behemoths’ failures not just in reducing costs but not even substantially restraining the rate of rise of health care expenditures. The real story is that in the Value paradigm, payers and managed care organizations across 25 years have failed and, in their failures, actually have extracted billions of dollars in return from the health care system. Truth be told is that “Value” is lacking in the billions of dollars extracted and generated in redundant, frustrating utilization management programs, formularies, step therapies, precertification requirements, prolonged appeals processes, incomplete and late coverage policies, patient cost-sharing, etc. Please just look at company SEC filings where these words are translated in to dollars. The bottom line is that payers and managed care companies actually have achieved negative (harm) patient benefit both to patients and to self-insured employers. Self-insured employers, like the three cited, have long suspected that the money paid out for the aforementioned UM programs have been relegated to black holes sucking dollars into them with the impossibility of definitive mapping of where the money went (e.g., medical costs column) and great uncertainty regarding the effects of the programs such dollars funded. Generally, the “Big 5” commercial insurer stock prices fell 3-5% on Tuesday on the Dow. I guess investors agreed that a techno company, a bank/investment house, and another investment house possibly could manage health care more effectively and efficiently than health insurers, PBMs, SPs, etc. The easiest initial way to cut costs would be to delete the onerous UM and like programs foisted on the system and on clinicians and patients! Finally, in a somewhat serious ask: Do we really need payer coverage policies with all the available guidelines, pathways etc? Again, as a senior insurer health lawyer said to me as she/he was leaving the company: “The best thing is that I will not have to say any more that Insurer X does not make medical decisions!"quotes

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Congressional Advisory Group Supports Changes In Medicare Doctor Payments

(KHN Morning Briefing) Jan 12, 2018 - The Medicare Payment Advisory Commission, or MedPAC, says one of the two payment tracks set up under a new reimbursement system is too burdensome for physicians and won't push them to improve care.

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William McGivney, PhD (Posted: January 17, 2018)

quotesThere are a few of us out there who will remember the famous Abbott and Costello routine that in continuous circular loops keeps begging the question “Yea, but who is on First?”. Practices and Cancer Centers provide care and treatment but also are business centers with each one generally qualifying as a multimillion dollar business. For businesses, uncertainty is always a negative. Uncertainty in federal regulation, especially in reimbursement processes, measures and requirements, causes confusion and inefficiency in practice planning and management. The moves (e.g., MIPS, OCM) by the federal government to programmatically transition physicians away from fee-for-service practice to Value-based decision-making have been beset by fits and starts with changes that contravene provider side efforts and practice investment in enhancing practice infrastructure and capabilities. The latest hiccup or, maybe more accurately, eructation in the sequence is exemplified by the MedPAC’s recommendation that the MIPS program be abandoned because the MIPS “system is too burdensome” for physicians and will not lead to improved care. MIPS cuts across therapeutic areas in American Medicine and, thus is not the main focus in Oncology where the OCM continues to evolve. In OCM, practice sentiment is in some situations turning negative with complaints about quality measures that do not relate well to every day practice, government feedback reporting that is confusing, and feelings that one is just checking all the boxes. In 2006, there were some discussions with CMS about using NCCN Guidelines as a basis for Quality of Care determinations. There were reasons why this NCCN-based process could not be considered for full implementation beyond being a CMS demonstration project for 2006. But now, given present-day back and forths and uncertainty, something built around the NCCN Guidelines deserves serious consideration. At the least, such a system might provide some relief from the policy routine which is becoming farcical to some and unsettling to others who invest hard-earned dollars in capabilities and infrastructure to satisfy evanescent rules and requirements. quotes

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